Billings Company is considering investing $250,000 in a new machine that will last four years and which is expected to produce net cash inflows of $80,000 (before taxes) per year. Assume straight-line depreciation, a salvage value of $50,000, and an applicable tax rate of 30%.

The net after-tax cash flow generated by this machine in Year one is:

Multiple Choice

• $71,000.

• $80,000.

• $68,000.

• $56,000.